Tuesday, December 30, 2008

Don Luskin points out what must be a very bad joke on the New York Federal Reserve web site. OUR Federal Reserve is trying to assure us that our investment in mortgage backed securities is secure because they are guaranteed by...drum role, Fannie Mae.

Does the agency MBS program expose the Federal Reserve to increased risk of losses?

Assets purchased under this program are fully guaranteed as to principal and interest by Fannie Mae, Freddie Mac, and Ginnie Mae, so the Federal Reserve's exposure to the credit risk of the underlying mortgages is minimal.

Go get'em tiger Mitch!! Now that he is in the minority ole Mitch is yellin and screamin about that evil runaway spending. Will his new found courage last? NO!!...Senate Republicans and their wonderful inflatable gonads.

"As of right now, Americans are left with more questions than answers about this unprecedented government spending, and I believe the taxpayers deserve to know a lot more about where it will be spent before we consider passing it," McConnell said in a statement, which will be publicly issued later today.

in 2007. In 2008, the burden will be much, much higher. Not only will taxpayers have HUGE losses in their own 401ks and IRAs but they will be faced with much higher Government employee pension costs. A DOUBLE WHAMMY!!

The pension plans of Taxpayers are defined contribution plans like IRAs and 401ks. They have NO guaranteed benefits. The retirement benefits go up and down with the value of IRAs and 401ks.

The pension plans of Government employees are very different. They are guaranteed benefit plans. Taxpayers, via our elected representatives, have guaranteed an ever increasing benefit amount and in the case of Tennessee they have written in a generous cost of living adjustment.

State and local government defined-benefit employee retirement systems paid $168 billion to 7.5 million retirees and survivors in fiscal year 2007, the U.S. Census Bureau reported today. This is a $12 billion increase from the previous year when 7.3 million received payments.

There were 2,547 retirement systems in 2007, with memberships of 18.6 million people who could be eligible for regular benefit payments in the future.

City workers with political clout claim to be injured at a rate that far exceeds any occupation tracked by the U.S. Department of Labor, according to a first-of-its-kind analysis by the Chicago Sun-Times that raises questions about whether all those city workers really were injured, and whether the city adequately investigates workplace accidents.

Which means that financially speaking, the spectacularly high dropout rate boils down to a spectacularly bad investment. Though there’s no specific data, one can imagine the countless millions that are wasted financing educations that never come to fruition. We could try to predict which students would be part of the 46% who don’t finish, then encourage those students not to go to college. But to do this would mean a lot of students who might graduate never get to give it a shot. That wouldn’t be fair. So what we can do instead is identify the 5% or 10% of students who are the least likely to graduate, and not send them to college.

The problem is, the current system provides no way, and no incentive, for doing that. In fact, the Free Application For Student Aid (FAFSA) doesn’t take into account an applicant’s academic record at all. The rationale behind this is reasonable and admirable: we don't want federal student aid to be restricted only to the best and the brightest, many of whom come from backgrounds that made it easy for them to excel. But doesn't it make sense, on some level, to withhold aid from the students who have shown during high school that they’re clearly not equipped to make it through four years of college? Doing so would be a big step toward recouping some of that wasted 46% of lost financing.

WASHINGTON — More than a third of top congressional staffers who left their public service jobs this year went to work for private lobbying firms or other groups seeking to influence the government, according to a USA TODAY analysis.

Under an ethics law passed last year, the House and Senate for the first time must list the names of departing staffers earning $127,000 or more per year. So far this year, 32 of the 193 top staffers who left government registered as lobbyists and an additional 42 went to work for consulting firms, law offices, interest groups and trade associations, the analysis showed.

Publicizing names of departing staffers gives the public notice that "they're cashing in on their expertise," says James Thurber, an American University lobbying expert.

Former congressional staffers are free to become lobbyists or otherwise work to influence the government as long as they follow ethics laws, including a cooling-off period. The new rules prohibit former Senate aides from lobbying anyone in the Senate for a year after they leave.

In the House, the one-year lobbying ban only applies to the House office or committee where the staffer worked.

Congress tightened the rules as part of a broader package of ethics proposals backed by Democratic leaders after they took control in 2007.

Madoff made a fortune, and he played politics with some of that money. In total, he and his wife, Ruth, have given $238,200 to federal candidates, parties and committees since 1991, with Democrats getting 88 percent of that. Overall, Madoff and other individuals at his company, Bernard L. Madoff Investment Securities, gave $372,100 in campaign contributions since 1991, with 89 percent to Democrats. The firm spent $590,000 on lobbying in the last 11 years, all but $10,000 of it with the lobbying firm of Lent, Scrivner & Roth. A search for funds with "Madoff" in their title in lawmakers' personal investments did not find any members of Congress with their own funds invested with him.

The following party committees, PACs and current members of Congress have received contributions from Madoff and his wife since the 1992 election cycle:

Yes, friends, those wacky environmentalist are now concerned that falling lumber prices will cause the timber companies to sell their land to developers. Wait, those are the same developers that are going out of business because no one wants to buy a house?

You might guess environmental groups would be glad timber prices have collapsed to where loggers' chain saws have fallen silent and sawmills are shutting down.

Instead, they're nervous. If logging doesn't pay, the same timber companies some environmentalists have blamed for ruining the forest may get rid of the forest -- selling off their prime real estate. Then subdivisions could grow instead of trees, absent the wildlife, clean water and other benefits forests typically present.

Tuesday, December 23, 2008

Kelly said when she asked a (Amtrak) customer service employee what to do, she was told: "Sometimes life puts you in a situation, where you need to learn a lesson. I would figure out what that lesson is supposed to be."

The Commercial Appeal used IRS migration data to analyze Shelby County migration and income. They found taxpayers moving out of Shelby County but even more important, they are being replaced with immigrants with lower incomes. Oh, and one fact not mentioned in the article, Memphis has the highest property tax rate in the entire State by a huge margin.

The income drain has been most pronounced within Shelby County. During a 10-year period ending in 2007, the county sustained a net loss of $1.83 billion in incomes among residents moving in and those leaving.

Not only did the number of wage-earners leaving (173,601) outnumber those coming in (155,660), but the average income of the outgoing residents was greater than those arriving -- $46,880, compared with $40,544.

The bleeding, however, hasn't been restricted to Shelby's confines. The entire eight-county Memphis metropolitan area suffered net income losses during eight of the 10 years, with the total deficit for the period exceeding $398 million.

Saturday, December 20, 2008

On a recent Inside Politics, Pat Nolan's excellent Tennessee politics interview program on Newschannel5, Pat interviewed Eddie Jones about the 1967 campaign to approve liquor by the drink. The campaign involved two interesting and significant abuses of political power.

1- The LT Governor kept secret an AGs opinion which nullified a bill-killing amendment by a Senator. She did amend the bill but, unknown to her of course, the AG had already said the bill could be passed in the House and become law without her amendment, which was a condition to get her vote. She was furious but couldn't stop the bill's passage.

2- Right before the vote occurred in Nashville, Mayor Briley, who supported the bill, said that in order to pass the bill he would have to "make the people thirsty." So, he called the police chief and had him shut down all the illegal liquor sales which had been openly tolerated at country clubs and printer's alley night clubs. Here is audio of the program discussing Mayor Briley's intervention.

A new division of the Census has started gathering data on job creation and business start-ups. The stats show that small business start-ups are the major source of job creation. Duh!

I understand that Phil Bredesen and his fellow politicians want us to love, admire, revere and most importantly VOTE them for "creating jobs" but the facts show that jobs are created by small entrepreneurial start up firms. The same firms that go about their business without Phil Bredesen ever once showing up for a photo op. As these stats become more widely known, I am quite sure the politicians will try to take credit for them but, in fact, their best course is to stay the hell out of the way and blow their hot air elsewhere.

One novel feature of the BDS is that business startups (new firms) can be tracked on a comprehensive basis for U.S. private, non-agricultural businesses. The fraction of employment accounted for by business startups in the U.S. private sector over the 1980-2005 period is about 3 percent per year. This measure is interpretable as the employment-weighted business startup rate for the U.S. While this is a small fraction of overall employment, all of this employment from startups reflects new jobs. As such, 3 percent is large compared to the average annual net employment growth of the U.S. private sector for the same period (about 1.8 percent). This pattern implies that, excluding the jobs from new firms, the net employment growth rate for the U.S. is negative on average. This simple comparison highlights the importance of business startups to job creation in the U.S.

Friday, December 19, 2008

Even in the best economic times, thousands of small businesses fail and we do not bail them out. I have been concerned all along with the unfairness of what we have been doing, primarily for the financial companies, and for what we attempted to do for the automobile manufacturers.

No company should be considered by our government as being “too big to fail.” And I realize that if everyone had voted the way I have, some very big companies would have gone under.

However, socialism has not worked anyplace in the world. In my opinion, the pain, as great as it would be, would be a lot less and our economy would recover a lot sooner if we would simply let the free market work.

get cut by local governments. This practice of using taxpayer money to get even more taxpayer money should be illegal but its not and many local TN govts spend lots of taxpayer money on lobbying. Hopefully this ridiculous practice will be outlawed soon in TN.

On December 18, the 10th circuit struck down Oklahoma’s ban on out-of-state circulators for initiatives. Yes on Term Limits v Savage, no. 07-6233. The decision is here. It is 16 pages long and says that there is no strong evidence that out-of-state circulators are more likely to engage in fraud than in-state circulators. Also it says that if Oklahoma needs to question circulators after the petition has been submitted, the state is free to pass a law saying that circulators must agree to return for questioning.

There are now four circuits that have invalidated bans on out-of-state circulators (the 6th, 7th, 9th and 10th), and only one circuit, the 8th, that has upheld them. Furthermore, the 8th circuit decision was from North Dakota, a state that has no voter registration, and therefore the 8th circuit decision can be said not to apply to the other 49 states that do have voter registration.

This decision is good news for Paul Jacob and his associates, who have been in jeopardy of a criminal prosecution for conspiring to bring out-of-state circulators into Oklahoma.

Reporting from Sacramento -- California's Democratic leaders were planning a vote today on a brazen proposal to raise gas, sales and income taxes through a series of legal maneuvers that would bypass the Legislature's minority Republicans.

The Democratic gambit, announced Wednesday, would raise $9.3 billion to ease the state's fiscal crisis by increasing sales taxes by three-fourths of a cent and gas taxes by 13 cents a gallon, starting in February. The plan would add a surcharge of 2.5% to everyone's 2009 state income tax bill.

Wednesday, December 17, 2008

So much of what is going on with the various bailouts can only be characterized as absurd. It sure would be nice if members of Congress could steal a few precious moments to actually OVERSEE what the hell is going on with these programs!!

Once again, the contract that the Treasury Department posted on its web site conceals the hourly rate that the government is paying Thacher Proffitt's lawyers, and omits most other information about the financial terms of the deal.

dollars. YEA, we negotiated the deal in complete and total secrecy so the press and OUR elected officials and taxpaying citizens have no idea what the final bill will be. YEA, we created 500 jobs (in an area of 78,000) but realistically many of those jobs will be filled by Kentucky residents who bear no tax burden for the deal.

A Treasury report out today pegs the U.S. government's operating cost at approximately $1 trillion, excluding transfer payments, which amounts to a trebling since 2007.

Most of the increase can be attributed to nearly $550b worth of "post-employment liabilities" -- pensions, health benefits -- for government employees, mostly veterans, liaibilities that, for some reason, either weren't estimated properly in 2007 or were simply ignored.

According to the report, the government spent a total of $3.0 trillion dollars and took in $2.5 trillion, and borrowed about $455 billion.

The U.S. government has approximately $1.9 trillion in assets; as liabilities, it counts $5.8 trillion in debt held by the public and $5.3 trillion in what the government owes to its employees. (I hadn't realized the government owed so much to its employees relative to other liabilities. Apparently, the government has deferred expenses for DoD pensions, the OPM pension plan).

Monday, December 15, 2008

Toyota Motor Corp. plans to indefinitely suspend the production start at its newest plant in Blue Springs, Miss., the Associated Press reported Monday.

Production on Toyota’s hybrid Prius was to begin in 2010 but the company said it will delay installing equipment and machinery indefinitely due to a slowdown in consumer demand, the Associated Press reported.

Construction on the $1.3 billion plant northwest of Tupelo began in April 2007 with a plan to build 150,000 Highlander SUVs annually.

Gallup's Lymari Morales writes, "for the first time since Gallup began asking this question in 1995, significantly more Americans say they turn to cable news networks daily than say they turn to nightly network news programs, though it is worth noting that the popularity of the network news programs has remained fairly stable compared with recent years."

The Internet has shown the biggest increase in popularity as a news source, with 31% of Americans saying it is a daily news source. This marks a nearly 50% increase since 2006 and a more than 100% increase since 2002.

The audit, which looked at the agency's operations between mid-2005 and mid-2007, also found other instances where lax policies opened the door for employees to steal or cheat.

Safety officials concurred with each of the audit's four findings and responded that the problems are being corrected, the report shows.

The unnamed fiscal director who worked on the $2.7 million contract for "services relating to the processing of commercial vehicle licensing and tax administration" didn't correctly handle the bidding process, the audit states. She allegedly circumvented the process through a series of steps that included "creating a bogus contract document, forging required signatures" and facilitating the flow of a half-million dollars in contract disbursements by coding the payments incorrectly. The company that received the contract wasn't named in the audit.

Auditors also found other instances where charges were handled incorrectly, such as "payments to a local government data processing company under a sole source contract and payments to a university," the report states.

According to confidential company documents obtained by The Associated Press, Reps. Bob Ney, R-Ohio, and Paul Kanjorski, D-Pa., spent the evening in hard-to-obtain seats near the Nationals dugout with Freddie Mac executive Hollis McLoughlin and four of Freddie Mac's in-house lobbyists.

Kanjorski declined comment through a spokeswoman. Ney ultimately served a federal prison term after pleading guilty to trading political favors for a golf trip to Scotland, other gifts and campaign donations in the Jack Abramoff lobbying scandal.

The Nationals tickets were bargains for Freddie Mac, part of a well-orchestrated, multimillion-dollar campaign to preserve its largely regulatory-free environment, with particular pressure exerted on Republicans who controlled Congress at the time.

Internal Freddie Mac budget records show $11.7 million was paid to 52 outside lobbyists and consultants in 2006. Power brokers such as former House Speaker Newt Gingrich were recruited with six-figure contracts. Freddie Mac paid the following amounts to the firms of former Republican lawmakers or ex-GOP staffers in 2006:

The ADA-AA rejects prior Supreme Court guidance that the ADA requires a "demanding standard" for establishing coverage and that "substantially limits" should be read to mean that an impairment must "severely restrict" a major life activity. P.L. 110-325, §2(b). The ADA-AA also expresses Congress's expectation that the EEOC will revise its regulation defining "substantially limits" as "significantly restricted." Id. In the absence of these exacting standards, the bar for establishing coverage under the ADA has been greatly reduced, allowing for a wider pool of potential complainants. Until the EEOC publishes new regulations, it remains unclear what the new definition of "substantially limits" will be under the ADA-AA, but it is apparent from the language of the statute that Congress's intent was to establish a definition of disability that did not serve as an insurmountable obstacle to coverage. Further, Congress expressly states that "the question of whether an individual's impairment qualifies as a disability should not demand extensive analysis." Id.

[...]

Though the ADA is silent on issues such as reasonable accommodation and "direct threat," the expanded definition of disability created by the ADA-AA will no doubt impact how employers, including federal agencies, treat these issues. With the sweeping revisions of the ADA-AA, it is certainly likely that an increase in litigation under the ADA will occur. Given direct instruction from Congress to ensure the broadest coverage possible, courts will now attempt to redefine the boundaries of disability discrimination.

a so-called obesity tax on non-diet soda to raise $404 million. The governor also is contemplating requiring new license plates to raise cash, reviving sales tax on clothing purchases, removing the tax cap on gasoline and threatening to require Indian retailers to collect taxes on sales to non-Indians by signing into law a bill passed earlier this year by the Legislature.

Instant democracy is getting closer. In 2011, Estonians will be able to elect their representatives using cellphones. How would it work and, more importantly, will it actually work?

Raul Kaidro, who is the spokesman of the SK Certification Center in Estonia, says that it will be easy and secure: The voters will just need to previously obtain a free authorized chip. This chip will have an encrypted digital signature, which will allow them to identify themselves and vote using a text message.

The mobile voting will not be the only way to vote: It will be an additional method to online and on-site voting, all of them connected to a central database for instant identification and registration of the vote.

Dec. 12 (Bloomberg) -- The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral.

Bloomberg filed suit Nov. 7 under the U.S. Freedom of Information Act requesting details about the terms of 11 Fed lending programs, most created during the deepest financial crisis since the Great Depression.

The Fed responded Dec. 8, saying it’s allowed to withhold internal memos as well as information about trade secrets and commercial information. The institution confirmed that a records search found 231 pages of documents pertaining to some of the requests.

“If they told us what they held, we would know the potential losses that the government may take and that’s what they don’t want us to know,” said Carlos Mendez, a senior managing director at New York-based ICP Capital LLC, which oversees $22 billion in assets.

can be done to make public records easily available. Michael Cass writes about Mayor Dean's executive order on Public Records access and to Mayor Dean I would like to say, much appreciated, but it is basically a call to comply with the minimum standards of the TN Law already in place. We can do much better in providing the Citizens of Nashville the type of Open Govt they deserve. A few suggestions for transparency and accountability:

- Put the check register of Metro online so citizens and press can easily access expenditures information. Many cities and counties across the country are providing this service. Also, archive previous years expenditure information in easily accessed spreadsheet format.

- Put all vendor and labor contracts online so citizens can easily find what obligations they have assumed as taxpayers. And again, archive old contracts so comparisons can be made.

- Assign staff to review each department's records and determine if important records can be digitized for easy online access by citizens.

The Goal should be to make it easy as possible for citizens to find public information online. The internet gives us unprecedented opportunities to make OUR government open and accountable like never before.

Friday, December 12, 2008

James Hirni admitted to allegations that he had conspired to commit honest services fraud in 2003, when, while lobbying on behalf of a construction equipment rental company, he plied two congressional staffers with a free trip to the World Series.

Hirni’s clients were attempting to tack amendments on to the federal highway bill that would push states to rent, rather than buy, construction equipment and force them to hire companies with high liability insurance coverage.

Of the two staffers, one, Trevor Blackann, was a legislative aide to Sen. Kit Bond (R-Mo.) who on the highway bill’s committee. The other, unnamed staffer worked on the House committee overseeing the bill. Blackann plead guilty in November to failing to report thousands of dollars in gifts on his tax returns.

According to Hirini’s plea, the two staffers traveled to New York, where they were chaufered around the city in a sport utility vehicle and were treated to everything from the game tickets to a $600 evening excursion at a gentleman’s club. The bill was discussed during the trip, and the amendments were later added. Later, both Blackann and the other staffer both worked to keep the amendments intact.

In a school replete with children of the near-famous, the Obama girls will be in classes with other well-known progeny, including, in Sasha's second-grade class, a grandchild of Vice President-elect Jr. Elsewhere in the school are the children of other well-known Washington figures, such as former recording industry lobbying head and CNN contributor Hilary Rosen, Democratic strategist Nick Baldick, former transportation secretary Rodney E. Slater, and incoming White House staff secretary Lisa Brown, as well as Kurt Campbell, a respected defense expert, and his wife, Lael Brainard, a former White House deputy economic adviser.

Sen. Alan Nunnelee, R-Tupelo, says part of increase could be used to provide a $2,000 tax credit to furniture companies for each of their cut & sew employees. Those jobs are being lost to foreign countries that pay much lower wages, he said.

The Senate Finance Committee met Thursday in Jackson with the Mississippi Furniture Association.

The Legislature, with the blessing of Gov. Haley Barbour, is expected to increase the tax on cigarettes. The debate now is centered on what to do with the revenue.

Ken Pruett, president of the Mississippi Furniture Association, said the state has lost 1,100 jobs in the furniture industry this year.

Maplight has a fascinating analysis of the House vote on the auto bailout and the amount of money received via campaign contributions from interests that were promoting the bailout. This kind of analysis is rough at best but interesting. Here is the TN delegation (Gordon said he would have voted Yes except for a technical glitch):

The lawsuit, Martinez vs. Regents of the University of California, was brought by dozens of U.S. citizens who pay out-of-state tuition at California schools who want the state to stop giving undocumented students in-state rates. They also want reimbursement for the extra tuition they have paid.

A three-judge panel of the California Court of Appeals ruled (PDF) in September that the practice violated the federal law and determined the case should go forward.

"Although (the lower court ruling) is not strictly binding, it is very powerful precedent," said Kris Kobach, a law professor at the University of Missouri-Kansas City who represents the plaintiffs. The ruling, which courts outside of California aren't obligated to follow, was the first time any court in the country determined whether the policy violated federal law.